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The Court of Appeals for the Federal Circuity (CAFC) has been busy on the patent eligibility front this month. After the recent Enfish decision, the CAFC handed down TLI Communications LLC v. AC Automotive, LLC the very next day. Unlike the decision in Enfish, the panel found the asserted claims invalid under 35 USC §101 as directed to an abstract idea.

TLI Communications recently asserted U.S. Patent No. 6,038,295 against a variety of parties. The ’295 patent “describes an apparatus for recording of a digital image, communicating the digital image from the recording device to a storage device and administering the digital image in the storage device.”

The court chose claim 17 as representative of the claims (although the patent also contained other independent claims reciting apparatus and system claims). Claim 17 recites:

A method for recording and administering digital images, comprising the steps of:

recording images using a digital pick-up unit in a telephone unit;

storing the images recorded by the digital pick-up unit in a digital form as digital images;

transmitting data including at least the digital images and classification information to a server, wherein said classification information is prescribable by a user of the telephone unit for allocation to the digital images;

receiving the data by the server;

extracting classification information which characterizes the digital images from the received data; and

storing the digital images in the server, said step of storing taking into consideration the classification information.

The district court concluded the claims were directed to “the abstract idea of taking, organizing, classifying, and storing photographs.”

The decision itself is not surprising given the claimed subject matter and the breadth with which the subject matter was claimed. The CAFC analyzed the claims under the two-step analysis in Alice, first determining if the claims at issue were directed to a patent-ineligible concept, and if so, considering claim elements individually and as an ordered combination to determine if the additional elements transform the nature of the claim into a patent-eligible application. In implementing step one of the Alice analysis, the CAFC concluded that claims directed to attaching classification data to images for the purpose of storing the images in an organized way is a well-established “basic concept,” citing Content Extraction for this purpose, and as such were encompassed by the step one analysis. In step two, the CAFC concluded that the claims failed to provide any element or combination of elements sufficient to transform the abstract idea into a patent-eligible application of that idea, stating that mere recitation of tangible components that perform well-understood conventional activity is insufficient to confer patent eligibility to an otherwise abstract idea.

“Although the claims recite that the abstract idea of classifying and storing digital images in an organized manner is carried out in a telephone system, the ’295 patent fails to provide the requisite details necessary to carry out that idea.”

TLI argued that the claimed methods were directed to an “improvement to computer functionality” as successfully argued in Enfish. The CAFC disagreed stating “…the problem facing the inventor was not how to combine a camera with a cellular telephone, how to transmit images via a cellular network, or even how to append classification information to that data. Nor was the problem related to the structure of the server that stores the organized digital images.” Rather the court characterized the improvements claimed as providing “…for recording, administration and archiving of digital images simply, fast and in such way that the information therefore may be easily tracked.” The panel noted that the specification does not describe a new telephone, a new server, or a new physical combination of the two and described the components in vague and general terms consistent with their use in the art, resulting in the components behaving “exactly as expected according to their ordinary use.”

The step two analysis in Alice touched on many of the same issues as discussed in step one, namely the use of generic physical components that performed as known in the art. The CAFC also noted that the specification “fails to provide the requisite details necessary to carry out” the ideas claimed (note that in Enfish the method for creating the self-referential tables was limited to the use of a particular four-step algorithm described).

In Enfish, the CAFC terminated the Alice inquiry at step one, finding that the claims as a whole were not “directed to excluded subject matter” and determined the self-referential database claimed improved computer functionality thereby satisfying an exception to the abstract idea classification. As such, the court examined the merits of the claimed invention in detail. While conducting the entire two-step analysis in this case, the panel appeared to examine a wider range of factors than in previous cases under the step one analysis as done in Enfish. As a result, the court in step one did more than compare the concept claimed to other concepts that had been determined to be abstract ideas in previous cases. It will be interesting to see if this expanded step one inquiry trend continues.

In summary, the factors that weighed against the claims in this case were the description in the specification that stressed the conventional activity of the recited tangible components and the failure of the specification to provide a clear means by which to solve a technological problem in the art (i.e., a challenge particular to the Internet or improving the functionality of a computer). In order to avoid a similar fate, in claims directed to subject matter that has been held to be an abstract idea by the courts, care must be taken to clearly point out how to implement the ideas described and link the described solutions to the solution of a particular problem known in the art.

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